In a live trading‑desk session, hosts Will and Anthony Cheung dissect the historic US non‑farm payroll report that showed a -20.5 million job change, the largest on record. They explain why markets reacted contrary to the headline shock—gold, US Treasury notes and the US dollar all fell, while equities found modest support. The duo highlights that the actual loss was less severe than the most pessimistic forecasts (-22 M to -35 M) and that the unemployment rate (14.7%) and average hourly earnings (4.7% YoY) beat expectations. They drill into the BLS industry breakdown, noting that the bulk of layoffs occurred in low‑wage leisure and hospitality jobs, and flag upcoming energy‑sector employment data as a watch‑list item. Throughout the discussion they demonstrate real‑time trade management: short positions in gold and 10‑year T‑notes, scaling out as prices approach pivot levels, and using the observed correlation among safe‑haven assets to guide exits. The session ends with a brief recap of the asset‑class correlations and a promotional sign‑off for Amplify Trading.
Chapters
Hi, you've joined us here at the Amplify Trading Desk. We've just traded the historic nonfarm payrolls data coming in at -20.5 million, a historic number. Now, whilst that might seem like bad news, the markets have actually reacted in perhaps a different way to what you would expect. I've got a short US bond T-note position on here. It's only a small position. I've been scaling out of the trade since the data came out. You can see on the chart, US stocks are moving slightly higher after that data. The euro versus the dollar is moving lower after that data, as is gold. Gold is really tearing lower down to its pivot level now, as is T-notes, which I'm short. So we've got bonds lower, gold lower, the dollar higher, and stocks being supported after what on the face of it would seem like quite a negative employment reading for the US economy. I'm going to pass over to my colleague Anthony Cheung to explain why that's the case and how you can interpret this type of economic data. Anthony, you've got screen sharing power. Over to you.
Thanks, Will. Yeah, I'm just— you mentioned gold. I'm just looking at gold on my chart here. And we broke out of that low that we traded in the overnight Asia-Pacific session. And now we've targeted and just hit that level on the high of the 5th. So if it does remain heavy, you've got the pivot level there. And I'd be looking at that coinciding with around those highs that were seen on the 6th as a way of managing or exiting that position. I know a few of the guys were looking at gold as well today. But yeah, the jobs number, just to reiterate what Will said, I mean, if you're new to markets, you're probably scratching your head a little bit going, wow, this is like the worst job situation we've ever seen. I mean, it dwarfs the financial crisis. The biggest one-month job loss in a financial crisis was 800,000, don't forget. And we've just seen -20.5 million. It's quite unbelievable. Markets move ahead of time. They're forward-looking in a sense, and they've had time to acclimatize to the fact that we're fully aware of this situation, about how bad layoffs have been in America given the lockdown put in place, well, pretty much in the middle to late part of March. So remember how markets reacted in March? Super volatile, massive down days. A lot of that was pricing in a lot of the economic reality we've just witnessed.
Gold new lows.
Yeah, so with the data today, just to summarize, -20.5 million was not as bad as expected, -22, and it certainly was nowhere near as bad as the -35 million, which was the most pessimistic estimate on the street. Coupled that with the unemployment rate came in at 14.7, expectations were for 16, the highest estimate was for 22%. So both those two key metrics were not as bad as expected. And also the average hourly earnings. I mean, if you, if you normally look at those, they were super high, 4.7% against the expected 0.4%. Now, whenever you see a rule here, whenever you see a piece of data that throws out an anomaly like that, which doesn't really make a lot of sense, always ask yourself, well, why? And if I look at this, this is the BLS's report of change by industry. Look where all the job losses are. They're in the lowest paid quartile of the types of jobs available in America when paid by hourly wages, which is in leisure and hospitality, the specific area hit the hardest. The one to watch next month is going to be some of the areas pertaining to the energy market and oil and gas, of course, given those negative prices.
Anthony, if I could just share my screen again. Yeah, we've just got gold. I managed to get a short gold on as well, actually, just as you were talking. I mean, gold moving down Just been filled on some gold breaking the pivot level here. This is a really interesting move. As you quite rightly explained, this is bad data, but not quite as bad as it could have been. We've got these, if you like, safe haven assets such as T-notes and gold grinding lower. I've still got that T-note trade on. We did find support at the pivot level. What's interesting for me now, Anthony, is US equities. US equities are notoriously the hardest thing to trade over nonfarm payrolls, and they've been up, they've been down, they've been up, they've been down. Ultimately, we're sitting here around that R1 level again, but definitely not something to touch US equities over the data because it could be good news, but then that means interest rates might move higher, which is then bad news for stocks, which is supported by lower interest rates. A much clearer picture, if you have a look across my 3 charts now, euro-dollar lower, that's dollar strength, okay, after this data. That's also moving gold in the same way, the same direction. That's also moving T-notes in the same way. Right now, just approaching the pivot level. I'm about to take one more of the T-note trade off. You can see I've got the bid in the ladder there. If that gets filled— there, there's one more gold filled as gold tries to— gold broken through the pivot level now.
The Dixie's just broken, Will. The Dixie's just got over the high of the day, really, that we've seen. So a bit more weight into the FX pairs.
And we can see that in gold. So I'm just scaling out of this position in gold as the Dixie strengthens. The Dixie, the dollar index— obviously, gold has an inverse relationship to the US dollar. As the dollar gets stronger, gold moves lower, the euro-dollar moves lower, T-notes moves lower. But the type of trader that I am, this is what I like to see. I like to see these correlations between asset classes. So I can tell, actually, look, if T-notes do hold up on this pivot level, if T-notes find it hard to break, then I really want to get out the rest of my gold. I'm going to take this opportunity because these 3 assets tend to move in the same direction when there's a shift in expectations of US monetary policy. Um, but that's it from us guys here at Amplify Trading. I hope you enjoyed this short session and a short demonstration. Certainly an interesting time to be involved in markets. And if you do want to look us up, AmplifyTrading.com. We look forward to seeing what we can do. Thank you very much.
